Starting Investment Flashcards

You're ready to begin putting together an investing portfolio, but first you must:

Answer: Learn about investing

Once you've concluded that investing is a smart option, you'll need to educate yourself on the subject. Learn everything you can about stocks, bonds, mutual funds, and other financial options.

The majority of people invest in stocks for the following reasons:

Answer: financial security as a result of investment profits

Stocks are typically purchased as long-term or short-term investments by most investors. Dividends are good, and if reinvested, can enhance your stock assets, but the money is in purchasing low and selling high.

Every excellent investment strategy begins with the following:

Answer: a clear declaration of financial objectives

You must have a clear knowledge of your life goals before you begin investing. Goals will assist you in defining your investment strategy once you've established them.

As a new investor, what is one thing you should keep in mind?

Answer: Start investing with a small amount that you can afford and contribute to your investment regularly.

Never begin investing until you have paid off all of your debts and are debt-free. Before you start investing, be sure you have a stable job. Begin investing with a small amount that you can afford and add to it on a regular basis.

How much of your salary should you put into investments if you want to retire early?

Answer: as much as 20% of your monthly take-home pay

You may need to invest as much as 20% of your earnings if you want to retire at the age of 50 and live off your investments. You can probably invest less money if you plan to wait on social security to help pay your bills.

What is one last piece of sound investment advice?

Answer: If it's clear that a section of your plan isn't functioning, a course correction isn't a bad idea.

If a section of your investment strategy isn't functioning, it's a smart idea to pivot in that direction. If, for example, you invested in a stock that has continuously lost value for several years, it's definitely time to liquidate your losses and look for a new investment.

What is a decent basic method for investing in equities that seems to make a lot of sense?

Answer: For the long run, invest aggressively, and for the near term, invest prudently.

You should "invest aggressively for the long term and conservatively for the near term," according to Kiplinger.com. If you're saving money for next year, keep it in something somewhat safe, but if you're saving for the long term, you can be more adventurous.

What exactly is churning?

Answer: Churning is the act of encouraging many trades that aren't essential.

Churning, according to Investopedia, is an unethical technique that full-service brokers are sometimes accused of using to boost their income. Remember that not all full-service brokers are worth their hefty commissions, as they are typically salespeople who push their firm's investments, which isn't necessarily in your best interests.

What word best represents how much today's money will eventually grow to?

Answer: Future value

Future value is the term for what today's money will grow to at a given rate of return over time. Present value is the opposite (today's worth of future money), principal is the original sum invested, and 'an investment' is too general to describe this specific time-value-of-money concept.

Banks in some nations offer loans for buying real estate in the United States. What are the primary participants' countries?

Answer: Taiwan, the U.K., and Canada

The leading foreign sources of bank financing for U.S. real estate are Taiwan, the U.K., and Canada — countries with stable economies and strong financial ties to the U.S. The other groupings include nations that are not the primary participants in this cross-border lending.

What values does NCUA promote?

Answer: National Credit Union Administration

NCUA stands for the National Credit Union Administration, the federal agency that charters, regulates, and insures federal credit unions. 'Alliance,' 'Affiliation,' and 'Association' are not the official name, so they're incorrect.

A $6 million property with 30 rental units is for sale. The estimated yearly gross income is $500,000. What is the multiplier for gross income?

Answer: 12x

The Gross Income Multiplier equals price divided by gross annual income: $6,000,000 ÷ $500,000 = 12x. The other answers result from incorrect division.

Which of the following statements most accurately sums up foreclosure through entry and possession?

Answer: Petition to enter, repossession, notice of eviction

Foreclosure by entry and possession follows the sequence of petitioning to enter, repossessing the property, and serving a notice of eviction — reflecting the lender taking and holding physical control. The other options describe auction-based or judicial processes, or invent steps that aren't part of this specific procedure.

What kind of influence is e-commerce having on investments in commercial real estate?

Answer: Significant

E-commerce is having a significant impact on commercial real estate — sharply reducing demand for traditional retail while greatly increasing demand for warehouses and distribution centers. Describing the effect as none, minimal, or merely devastating mischaracterizes its broad, substantial influence across property types.

David, the owner and lessee of a business building, is responsible for the facility's taxes, upkeep, and insurance. What kind of lease arrangement is there between David and his tenants?

Answer: Gross

Because David, the owner/landlord, pays the taxes, maintenance, and insurance, the arrangement is a gross lease, where the landlord covers operating expenses. In net, triple net, and percentage leases the tenant bears some or all of those costs, so they don't fit.

Agot enjoys shopping at the nearby neighborhood mall. Despite the fact that there might be a lot of traffic at certain times of the day, the location is quite convenient, and the parking lot is simple to enter and exit. Where is the local shopping mall for Agot?

Answer: On a corner-lot, at the intersection of two major thoroughfares

A neighborhood shopping mall needs maximum accessibility and visibility, so a corner lot at the intersection of two major thoroughfares is ideal — it draws traffic from multiple directions with easy entry and exit. Locations buried in an old neighborhood or on the edge of a congested downtown offer poorer access and visibility.